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Google Shakes It Up With Chromecast

Here's what all the noise was about Monday morning. At
Netflix
(
NFLX
) headquarters, people were cheering. At the big cable companies,
they were shaking in their boots. At
Amazon
(
AMZN
), one executive might have been trying to explain what went wrong.

It was all about a thumb-size, $35 gadget called Google Chromecast
that came out last week with little fanfare, almost as an
afterthought to the announcement of a new version of its Nexus 7
tablet.

It's sold out already, with more stock due in three or four weeks.

Google Chromecast is a USB device or "dongle" that plugs directly
into any HDTV so that you can wirelessly play video and music from
the Internet on a big screen. It doesn't use a remote, doesn't have
a set-top box, and has no interface to speak of. It's supposed to
be close to plug-and-play. You download an app in order to connect
it to your Wi-Fi service. And then you click on a button to watch a
video or play music on your TV.

You can use any device-that is, any smartphone that uses Google's
Android software, or any tablet or PC, with the Google Chrome
browser. (Chrome for
Mac
(
AAPL
) and Chrome for
Windows
(
MSFT
) are supported.)

In this initial phase, the Chromecast smartphone app has only
Netflix and Google's own Google Play and YouTube sites built in,
plus
"select other content"
that is not identified. That means users will see a button on those
sites that allows them to start a "cast."

In fact, you can play any video available on any site once you've
set up Chromecast, though some occasional loss of video quality has
been reported by early users. There is a difference though. When
you're using the app and accessing partner content such as Netflix,
the video is downloaded directly from the cloud, not from your
computer. While you watch, your device is free. If you stream from
any other site, you're streaming it from your device, and mirroring
it on the device.

So, Amazon and others didn't really miss the boat, technically. But
they might have missed out on the initial promotion, marketing
muscle, and buzz that will come with the product. Netflix is
effectively the default choice, not Amazon Prime.

The
New York Times
expects
some major broadcasters to move quickly to block their programming
from Chromecast, just as they blocked Google TV. Surely the cable
companies that pay to carry their programming will make that
suggestion.

It's difficult to overstate how big Google Chromecast could be, if
it is all it's cracked up to be. All of the other attempts at
"Internet TV" have flopped, or have appealed only to a narrow
audience of enthusiasts. All were difficult or expensive to set up
or to use-or they were perceived to be, which is just as bad.

Google Chromecast doesn't do anything that you can't do now with an
HDMI video connector. But that requires some fiddling every time
you want to watch a movie. The result is awkward, and it ties up
your device.

All of the above may be why only 15% of consumers currently stream
video from the Internet to television, according to Google's own
research.

If Chromecast takes off, it will be interesting to see how Google
continues to work to build its programming. Google Play and YouTube
both have an infinite amount of video, but neither has anything
like the recent hit movies and television series, or the low
monthly pricing that Netflix and Amazon offer. It's hard to argue
that YouTube needs to boost usage, but Google has shown that it is
very interested in boosting use of its pay-per-view options.

And it does look as if Google has a hit on its hands. We all know
that "sold out" can be a marketing ploy. But Google Chromecast is
sold out at the three sites that have been announced as suppliers:
Google Play, Amazon.com, and
Best Buy
(BBY). Netflix has withdrawn a three-month free subscription offer
that had been packaged with it. Google Play promises more stock in
three to four weeks.

Inevitably, it's listed on
eBay
(EBAY) at premium prices. Sales are recorded for up to $130,
packaged with the Netflix promo.

As of Monday, early users rated the device at four out of five
stars on Amazon. Comments were generally positive, ranging from
"miraculously astounding" to reports of minor setup problems and
video quality issues. Even some of those contributors cut Google a
break and called them first-iteration nits.

The review on TechCrunch is admiring, but says, "the Chromecast is
a wireless portal
to your TV, and doesn't try to be anything more." But that's not
quite true, or we all would have had wireless portals to our TVs
years ago. Google figured out how to do it simply. And there's
nothing simple about that.

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